Ethereum drops as low as $450 as ICO crackdown continues
Tighter ICO regulations and possible sell-offs drop Ether to new 2018 lows, but a bounce-back suggests demand remains.
It's been a painful week for all cryptocurrencies, but Ethereum in particular has been struggling hard, at one point dropping below $500 for the first time in 2018, and resetting its prices back to pre-December levels.
This might be largely due to Ethereum's unique position as an ecosystem for a wide range of tokens, with an emphasis on ICO activity. Ether is widely used for ICO buy-ins, so demand for the token might be dropping as the SEC and other regulatory bodies start looking more closely at coin offerings. Some upcoming ICOs are suddenly in limbo, and many ETH holders might no longer need the tokens they have.
While cryptocurrencies in general are looking like they'll remain beyond a tight regulatory grip in the near future, ICOs might be in limbo and subject to tighter control, with the SEC and others moving to enforce their token sales as securities offerings.
The suddenness of the current drop might also be due to token sell-offs from some Ethereum projects, EOS in particular. According to SANbase it's recently moved over 400,000 ETH to exchanges. This might be significant for a couple of reasons.
Firstly, EOS is a direct competitor of Ethereum despite operating on the same blockchain. It's one of dozens of "Ethereum killer" tokens, which can broadly refer to any cryptocurrency which offers scalable and user friendly smart contracts, created with common programming languages rather than Ethereum's native Solidity language, which is known for being tricky to use and prone to expensive mistakes.
EOS will soon be moving to its own mainnet blockchain. Some might argue that its developers have an incentive to tank Ether prices with a massive sell-off ahead of the shift, in order to get a competitive advantage after launch.
The timing of EOS' Ether movements coincides with this plunge, but it's not necessarily related at all. Overall Ethereum's withdrawal might be most closely tied to ICO uncertainty, rather than anything else.
And despite plunging lower than most, and being slower to recover than bitcoin and other cryptocurrencies, prices don't appear to be staying down. Ether dropped below $500 a couple of times in a couple of hours but didn't stay there long in either case. Despite the uncertainty and slipping usage, there still seems to be plenty of demand for the token, especially when the price gets this low.
Ethereum prices - 24 hours
Disclosure: At the time of writing the author holds ETH, IOTA, ICX, VEN, XLM, BTC, NANO
- Ethereum price remains volatile as global equities market plunges further
- Today’s crypto movers: Bitcoin (↓0.10%), Ethereum (↓1.25%), Polygon (↓6.86%) and Arweave (↑10.03%)
- FTX reaches a deal to buy BlockFi for up to $240 million
- Ethereum price stagnates as further drop looks imminent
- Bitcoin’s value jumps up despite fundamentals showing major weakness